Yahoo is giving Nelson — who is the internet company's global editor-in-chief — an annual compensation package of $5 million a year, Politico said, citing a source with direct knowledge of the deal.

Yahoo CEO Marissa Mayer personally recruited Nelson, and waited for Nelson's noncompete to expire after she left Time Inc. in 2013, according to Politico.

Mayer described herself as Nelson's "biggest fan" on her Tumblr page. "I have followed her work for nearly 20 years. She was the first and only name on my list for Editor-in-Chief of Yahoo and I'm so happy that we have made this a reality!" Mayer wrote.

Nelson is among several high-profile and expensive hires that Mayer has made from the media industry, including TV anchor Katie Couric, who reportedly renewed a $10 million contact with Yahoo, and tech writer David Pogue. Despite all the big names, Yahoo's media unit has not done much to help revitalize Yahoo's business.